When will electric cars be mass adopted?  And which countries have already arrived there?

When will electric cars be mass adopted? And which countries have already arrived there?

The US and China this month passed the 5% mark for electrified new car sales. Understand why this level represents a turning point in the market

Anyone over 40 will remember the first time they held a smartphone. The devices were weird, expensive, and innovative enough to draw a crowd at parties or small groups of people. Less than a decade later, the strange thing was not having a device.

Now society is witnessing a new milestone of change with the electric vehiclesaccording to a Bloomberg analysis that shows that many countries are reaching an inflection point where the electric powered cars are one step away from becoming a mass technology.

The United States is the country that most recently surpassed what has become a critical inflection point for electric vehicles: 5% of new car sales sold in the American market are powered by electricity alone. This threshold signals the beginning of mass adoption of EVs, the period when technology preferences change rapidly, according to the analysis.

Over the past six months, the US has joined Europe and China — collectively the three biggest auto markets — in pushing past the 5% mark. If the US follows the trend set by 18 countries that came before it, a quarter of new car sales could be electric by the end of 2025. That would be a year or two ahead of most major forecasts.

Behind every country that has crossed an electric vehicle tipping point is a program of federal incentives and pollution level standards. In the US, the Joe Biden administration last year issued an executive order requiring EVs to make up half of all new vehicles by 2030 (including plug-in hybrids). According to the tipping point analysis, it should hit that target with several years to spare.

Why is 5% so important?

The most successful new technologies—electricity, televisions, cell phones, the internet, and even LED lights—follow an S-shaped adoption curve.

Sales move quickly in the early adoption phase and, surprisingly, bounce back when technologies become dominant — the top of the S-curve represents the last resisters who refuse to give up their old foldable phones, the so-called ‘flips’.

In the case of electric vehicles, 5% seems to be the point at which early adopters are overtaken by conventional demand. Before that, sales tend to be slow and unpredictable. After that, rapidly accelerating demand follows.

Countries where all-electric cars account for more than 5% of new cars:

  • Norway: 83.5%
  • Iceland: 51.7%
  • Sweden: 28.7%
  • Denmark: 17.4%
  • China: 16.7%
  • United Kingdom: 16.5%
  • Switzerland: 16.4%
  • Netherlands: 15.9%
  • Austria: 14.8%
  • Finland: 13.9%
  • Germany: 13.5%
  • Ireland: 13%
  • France: 12.3%
  • Portugal: 11.6%
  • Belgium: 11%
  • South Korea: 6.5%
  • New Zealand: 6.2%
  • United States: 5.3%
  • Italy: 4.2%

It makes sense that countries around the world would follow similar patterns of electric car adoption. Most impediments are universal: there aren’t enough public chargers, cars are expensive and in limited supply, and buyers don’t know much about them. Once the path has been paved for the top 5%, the masses soon follow suit.

Thus, the adoption curve followed by South Korea from 2021 ends up looking a lot like that adopted by China in 2018, which is similar to Norway after its first quarter of 5%, in 2013. The next big automotive markets are approaching. inflection point this year include Canada, Australia and Spain.

Higher percentage for hybrids

The above analysis is for vehicles that run on batteries only. Some countries, particularly in Europe, were quicker to adopt ‘plug-in’ hybrids, which have smaller batteries backed up by a gasoline engine. Including these, the world has just passed 20 million electric vehicles on the road, and that number will double again by the end of next year, according to a recent report by analysts from BloombergNEF.

As using a ‘plug-in’ hybrid, whose battery used to power the electric motor can be charged directly through an outlet, does not require the same level of infrastructure or consumer awareness, the initial phase of adoption was less consistent. .

A consistent tipping point for this broader category of electric vehicles was not reached until 10% of new vehicles had an outlet.

The US and China have mostly skipped ‘plug-in’ hybrids and gone straight to all-electric vehicles, and the US has yet to cross the 10% threshold.

Capacity of automakers

Continued growth also depends on the ability of automakers and their suppliers to ramp up production quickly enough. Volkswagen, Ford and BMW aim for 50% or more of their global sales to be all-electric by the end of the decade.

It turns out that automakers also have inflection points. Factories must be retooled and supply chains reconfigured. For the greatest cost savings, the entire vehicle must be redesigned with electrification in mind. In Europe, when 10% of an automaker’s quarterly sales are electric, the share triples in less than two years.

The giant Toyota has not reached the 10% threshold for electric vehicles in Europe. The Japanese automaker’s target of 3.5 million annual electric vehicle sales by 2030, as part of its annual sales of 10 million vehicles, is among the least aggressive of major automakers. In the case of Tesla, the world’s largest electric vehicle maker, sales are all-electric.

Is the world’s transition to electric vehicles inevitable?

So far, 90% of the world’s electric vehicle sales have come from the US, China and Europe. This means that the countries responsible for about a third of global annual car sales have not passed the tipping point. None of the countries in Latin America, Africa or Southeast Asia have made the leap. If they do, it is uncertain whether global miners will be able to keep up with demand for battery metals.

Still, global sales of electric vehicles have tripled in the last two years, according to the International Energy Agency (IEA). All of the net growth in global car sales in 2021 came from electric cars, and this is a trend that BloobmergNEF’s forecasts suggest will continue indefinitely. This year could be the high point for vehicles on the road with no outlet.

Applying tipping point analysis across the world, the share of all-electric vehicles crossed the 5% threshold for the first time last year. Including plug-in hybrids, the 10% inflection point will be passed sometime this year. If the trends are true, one can expect accelerated demand.

Source: O Globo Agency

Related post

Founding father of Webmotors bets on the electrical automotive (and receives his 1st funding)

Founding father of Webmotors bets on the electrical automotive…

Entrepreneur Sylvio de Barros has a relationship with the automobile market that has lasted almost three decades. He founded Webmotors, one…
How Brazil’s financial system compares to different international locations, based on IMF projections for 2023

How Brazil’s financial system compares to different international locations,…

A global economy still affected by the generalized rise in inflation and interest rates, the war in Ukraine and the new…
Depreciation of used vehicles by Localiza worries the market;  firm sees “normalization”

Depreciation of used vehicles by Localiza worries the market;…

Localiza released results above market expectations in the third quarter, the first with numbers combined with the purchase of Unidas. But…

Leave a Reply

Your email address will not be published. Required fields are marked *